French car-maker Peugeot started work at Sanand plant recently. Stone laying ceremony took place on November 3, at the 600 acre site at Sanand situated about 40 kilometers from Ahmedabad. The plant, which will be Peugeot’s 17th globally, will provide direct employment to 5,000 people and indirect employment to another 25,000 persons. It invests nearly Rs 4,000 crore in the facility and the project will be commissioned by 2014.

The company will produce 1.7 lakh cars in the first phase and will raise it to 3.4 lakh in 2016. The upcoming facility will also be used to manufacture petrol engines and gear boxes.

The European car-maker will produce B-plus, C and D class cars for the Indian market. Its model 508 will be the first to get rolled out in 2014. Later on Peugeot will also bring its hybrid (diesel and electric) vehicles to India. It has already tied up with Ford for diesel engines and with BMW for gasoline engines. Of the 600 acres, about 100 acre will be used by its vendors.

Gujarat has already attracted many auto investments recently and Sanand is becoming a center for auto manufacturing as Tata Motors and Ford India had already arrived there. Ford Motors too has began its work on its second Indian facility that will roll-out the first car in 2014.